Tweet from a Bitcoin Magazine analyst Dylan LeClair BTC mining firm Iris Energy said it was close to defaulting on a $103 million loan held by BTC. New York Digital Investment Group (NYDIG).
He further stated that ASIC miners are being held as collateral against loans, meaning that if Iris Energy fails to meet its repayment schedule, the mining equipment will be confiscated.
The terms of the loan call for repayments of principal and interest totaling $7 million per month. However, the company’s current mining revenue is lacking, generating only $2 million per month.
Bitcoin miner Iris Energy is nearing default on a $103 million loan made by NYDIG to a special purpose vehicle.
Loans secured by ASIC miners have monthly principal and interest payment obligations, or $7 million per month, and miners are generating $2 million per month in profit. pic.twitter.com/919Sdb1040
— Dylan LeClair 🟠 (@DylanLeClair_) November 2, 2022
Bitcoin miners under pressure
In recent weeks, stagnant prices and rising mining difficulty have hampered the profitability of Bitcoin mining.
Reported by Hashrate index The website, released Oct. 19, said several factors were putting “a lot of pressure on the bitcoin mining industry” in the third quarter.
“The cost to generate 1 BTC has increased significantly since last year due to rising electricity costs and the collapse of hash prices.”
Tight profit margins have helped public companies sell mining equipment to pay off debt, with ‘damaged asset sales’ materializing during the quarter.
The market value of Iris Energy’s miners is estimated at $65 million to $70 million, significantly less than the principal amount.